THE WHAT? Revlon has announced its results for the third quarter of the current financial year. The US beauty giant saw sales plummet 20.1 percent yoy to US$477.1 million in the three months to September 30, 2020 versus US$596.8 million in the prior-year period.
THE DETAILS The company’s fragrances division was the hardest hit with sales tumbling 24 percent, while the eponymous Revlon segment saw a drop 23.9 percent and the Elizabeth Arden and Portfolio units experienced a less dramatic fall of 14.9 percent and 16.2 percent respectively.
Operating loss stood at US$9.7 million, versus US416.7 million of operating income during the prior-year period, which Revlon said was primarily driven by lower net sales and lower gross profit margin.
Debra Perelman, Revlon’s President and Chief Executive Officer explains, “While COVID-19 continues to have a significant impact on both the beauty industry overall as well as on our business, I am pleased that our third quarter 2020 results reflected a sequential improvement in our net sales decline versus the prior quarter. We remain diligent in managing our cost base to reduce COVID-19’s impact on our profitability. During the third quarter, the Company made further progress in expanding its e-commerce business, which now represents approximately 12 percent of the Company’s total net sales exceeding our expectations. Also, based on the aggregate principal amount of 5.75 percent Senior Notes tendered into the Company’s pending Exchange Offer, the Company expects to close that transaction later this week, giving us the additional runway needed to further execute on our business strategy, including investing in the brands and markets where we have scale, and growing our e-commerce business. We would like to thank all of our stakeholders for their support during the transaction. While we still have challenges to face – namely the ongoing impact of the COVID-19 pandemic – we believe we have the right long-term strategy in place and will continue to execute against it.”
THE WHY? With Revlon already struggling to turn a profit pre-pandemic, COVID-19-related closures haven’t helped any. The company was heavily reliant on physical retail coming in to the pandemic, and trades predominantly in the hardest hit categories: color cosmetics and fragrances.